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Al Madina Insurance anticipates a robust growth in takaful insurance business in Oman, if the trend in neighbouring countries is any indication. Al Madina expects the market to grow between OMR60 million to OMR70 million in worst case scenario and OMR150 million to OMR180 million in best case scenario in the next three to five years, the company's chief executive officer Gautam Datta said. He added his company did not change the premium, after converting it into an Islamic insurance company from January this year. Referring to re-insurance, he said Al Madina has a re-insurance programme of over 55 per cent and is planning to expand its retail and personal lines portfolio.

Willis Group Holdings P.L.C. is set to offer sharia-compliant commercial real estate coverage in the United Kingdom. The coverage will be offered through the Islamic insurance platform developed by Cobalt Underwriting Services Ltd. The policy retains price neutrality, meaning premiums are equivalent to those in a conventional insurance policy. In March, Cobalt Underwriting added QBE Insurance Ltd.'s European division to its platform.

Insurance broker Willis Group Holdings will offer sharia-compliant commercial real estate coverage in Britain for the first time. New York-listed Willis will offer the coverage through the Islamic insurance platform developed by London-based Cobalt Underwriting. The policy retains price neutrality, meaning premiums are equivalent to those in a conventional insurance policy. Cobalt's platform uses a syndication model to help spread risk across a panel of underwriters, allowing multiple insurers to pool their capacity while each can subscribe to their desired level of risk though individual Islamic windows. The risk is priced by a lead insurer and other firms must then subscribe under similar terms.

The expected total investments of the property business of the Egyptian Takaful Insurance Company will reach EGP280 million by the end of Month, Mr. El-Sayed Bayoumi - head of the banks investment department said. The investment returns of the company reached EGP36.7million at the end of the third quarter of this year against EGP26million in the previous period.

According to the Qatar Islamic Insurance Company (QIIC) the ratings agency Moody's Investors Service has affirmed its insurance financial strength rating (IFSR) 'Baa2'. It changed from “Stable” to “Positive”. This is based on the ongoing strong performance. Moody’s here see the reflection of the very strong capitalization in relation to the insurance risk. A sustained strong profitability on the underwriting average Return on Capital and the average combined Ratio was another reason. QIIC is one of the world’s leading Islamic insurance companies. The company recorded a 3 percent increase in gross contributions in 2013. This was largely driven by an increase in General Accident, Takaful Life and Health business.

Analysts expect to see some consolidation in Malaysia's takaful sector as a result of the Financial Services Act and the Islamic Financial Services Act. Under the new rules, composite insurers and takaful players are required to operate their life and nonlife units under separate licenses and have until 2018 to meet the requirement. Industry observers said that those affected should start looking for mergers and acquisitions instead of waiting for four more years to split their businesses.

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Takaful received a grim assessment in the Islamic Financial Standards Board (IFSB) and Islamic Research & Training Institute (IRTI) Mid-Term Review (MTR), which was released last week. The takaful business model faces significant challenges, according to the MTR. The challenge starts with the gap between how takaful operators are organized in theory and practice. Moreover, Islamic insurance firms have been not been successful so far outside of a few countries like Saudi Arabia and Malaysia in reaching "critical mass". If the new firms are unable to grow to a large enough size, administrative costs become very steep and reserves will not be sufficient enough to cover losses. If takaful operators engage in a consolidation process (should regulations allow it), it would improve the underwriting marketplace.

A legal dispute between Pakistani insurance firms and regulators has been resolved after the country's five takaful firms had challenged the new takaful rules introduced in 2012. Under the agreement, insurers will have to allocate 50 million rupees ($506,100) in capital to their window operations, from no capitalisation requirement in the original rules. The takaful rules will be applicable after a three-month period and the regulator would also amend them to allow takaful firms to co-insure risks alongside conventional players, which the initial rules had forbidden. Takaful's share of the total insurance market is estimated at less than 3 percent. The regulator has now received five applications for takaful windows and expects as many as half of all conventional insurers to eventually apply for a licence.

Over the last two years, M&As in the Malaysian insurance sector have mainly involved conventional insurers, and analysts foresee some consolidation taking shape in the takaful sector in view of the Financial Services Act (FSA) and the Islamic Financial Services Act (IFSA). Among the candidates for potential M&As are Takaful Ikhlas Sdn Bhd, a unit of MNRB Holdings Bhd, and Syarikat Takaful Malaysia Bhd (STMB). The IFSA may prompt MNRB to sell its stake in Takaful Ikhlas to a strategic partner, as further internal capital injections could be complicated. In the next few years, the main thrust for M&As is expected to be on the general insurance and general takaful industry. The life insurance sector sees to have consolidated somewhat for the time being.

Islamic finance, banking, and takaful has a large potential in the US and Canada despite several setbacks and various obstacles and hurdles. In terms of the United States, a 100% truly Shariáh compliant takaful company may not be possible at this time in the USA as many states have limited investment of collected premiums to non-Shariáh compliant investment grade rated bonds. However, the US has seen two major sukuk issuances and there is a large potential for further sukuk. In terms of Canada, there have been no sukuk issuances and there are no Islamic banks. The only positive ruling for Islamic finance in Canada thus far has been the permission of Islamic mortgages under Canadian law. Aside from constitutional hurdles and the lack of regulations and laws, which permit Islamic banking in North America, many people have a fear of Islam and the words Shariáh and Islamic.

Contents
Revised Shariah Screening Methodology: 1
Expands ICM’s Global Reach
SHARIAH
New Shariah Advisory Council Resolutions 3
DEVELOPMENT
Region’s First Structured Covered Sukuk 7
Royal Award for Islamic Finance Calls for Global 9
Nominations
SC and Autoriti Monetari Brunei to Strengthen 9
Efforts in Greater Cross-border Activities
SC Leads Islamic Finance Taskforce to Publish a 10
Report on Enhancing Infrastructure for ICM
REGULATORY
IFSB-IOSCO-SC Collaborate on Disclosure 11
Requirements for ICM Products
SC Revises Equity Guidelines for SPACS 12
Technical Note on the Application of SC’s 13
Guidelines In Relation to Non-Tradable and
Non-Transferable PDS and Sukuk
FEATURES
2013: Another Resilient Year for the Global 14
Islamic Finance Industry
Global Islamic Funds Industry: Achieving 18
Growth Under Challenging Times
Harmonisation of Shariah Rulings 22
in Islamic Finance
News Round-up 29
STATISTICAL UPDATES
Malaysian ICM – Facts and Figures 32
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The Dubai-listed Dar Al Takaful will raise paid-up capital by 50 per cent, or Dh50 million, to Dh150 million through right issues, plunging its shares by nearly 3.5 per cent in the early morning trade of May 8. Rights shares will be offered to shareholders who own shares at the close of trading on Wednesday, May 14, 2014. The right issue will be issued at the par value of Dh1 per share and one ordinary share for every two shares. However, any surplus shares will be allocated to subscribers from shareholders or non-shareholders on a pro rata basis. The Islamic insurance company earlier this year signed a deal with Daman Investments to manage it investment account.

Morocco's finance ministry has submitted a bill to the General Secretariat that will introduce takaful in the country.
A ministry official said the bill will enable the formation of takaful firms as separate entities instead of being units of insurers. If all processes move ahead as planned, takaful could be introduced in Morocco by the end of 2014.

In some countries such as Indonesia, creating shariah-compliant insurance products can touch the lower middle income people. However, awareness for micro insurance, in general, and Islamic micro insurance in particular is still very low. This will affect SME's decision to buy Takaful products, although the affordable premiums and significant benefit are the main determinant of preference between conventional insurance and Islamic insurance. In order to rise the awareness of Islamic micro insurance among BMT and insurance companies, the Islamic Economic Society (MES) held business matching events which were attended by dozens of BMT. Through these efforts, MES hopes to lead Indonesian BMT opinion that Islamic micro insurance is very important as one of the risk mitigation strategy for business customers.

International law firm Simmons & Simmons and the Kyrgyz Republic have signed an agreement to provide consultancy services for the development of laws and regulations, supporting the introduction of Takaful and Sukuk in the Kyrgyz Republic. The consultancy services to be provided by Simmons & Simmons are to be funded under a technical assistance grant provided by the Islamic Development Bank (IDB). First Vice Prime Minister of the Kyrgyz Republic, HE Tayirbek Sarpashev, noted that upon the signing of this Agreement, the Government expects the economy to attract large investments that will favourably affect the development of the financial market and banking sector. The Simmons & Simmons team is led by Muneer Khan, assisted by managing associate Tariq Hameed.

In some countries such as Indonesia, creating shariah-compliant insurance products for the lower middle income people is a necessity that slowly started to gain attention and priority. Awareness for micro insurance, in general, and Islamic micro insurance in particular is still very low. This will affect SME's decision to buy Takaful products. In order to integrate equation viewpoint of Islamic micro insurance between BMT and insurance companies, the Islamic Economic Society (MES) actively held business matching events which were attended by dozens of BMT. Through these efforts, MES hopes to make Indonesian BMT aware that Islamic micro insurance is very important as a risk mitigation strategy for business customers.

Pak-Qatar Takaful Group recorded a strong growth with a combined turnover of Rs5.5bn ($54m) for the year ended December 31, 2013. The Group made a profit of Rs74m ($0.7m) during the year. Pak-Qatar Takaful Group, which comprises of Family Takaful and General Takaful, reviewed and approved the financial statements of Pak-Qatar Family Takaful and Pak-Qatar General Takaful for the year during the group's board meeting held recently in Doha. The company's paid-up capital is in excess of Rs710m, with credit rating of 'A' (Stable Outlook) by JCR-VIS Credit Rating Co Ltd.Pak-Qatar Family is recipient of several domestic and international awards and nominations.

The General Assembly of the Arab Orient Takaful Insurance Company approved to surge its capital to become EGP77.330 million, through pumping EGP12.330 million which started from April17 2014. Mohamed Akef, deputy executive director of financial and administrative affairs said that the Assembly decided financing the increase of cash distributions to shareholders, noting Arab Orient pumped EGP15 million at the end of the last year. The Extraordinary General Assembly agreed to move the company's main headquarters to El-Manial instead of Masr El Gedida (Heliopolis) starting next May, pointing out that the members, shareholders and representatives from the Egyptian Financial Supervisory Authority (EFSA) have attended the two assemblies.

Syarikat Takaful Malaysia has announced a final single-tiered dividend of 40%, which its shareholders approved at its AGM on Tuesday. Takaful Malaysia posted record-breaking results for 2013 as profit after tax and zakat grew by 34% to RM134.4mil from RM100.1mil in the previous financial year, with return on equity at 25.9%. With the proposed final dividends, the total single tier dividends for 2013, including the two interims dividends paid during the year, will be 82%, and this translates into a dividend yield of 6.6% based on the company’s share closing price of RM12.40 as at April 21, 2014. Group managing director, Datuk Mohamed Hassan Kamil said the company’s ultimate goal was to outpace the market and to strengthen its image through various advertising channels and marketing activities.